VA's $141.9M PC3 contract for physician services in Arizona saw strong performance in Q4 FY2021

Contract Overview

Contract Amount: $141,931,528 ($141.9M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-07-01

End Date: 2021-09-30

Contract Duration: 91 days

Daily Burn Rate: $1.6M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: EXPRESS REPORT FOR 4QTR FY2021 UNDER PC3 CONTRACT

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85053

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $141.9 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT FOR 4QTR FY2021 UNDER PC3 CONTRACT Key points: 1. The contract achieved a high level of performance, indicating effective service delivery. 2. Competition dynamics for this contract were robust, suggesting competitive pricing. 3. Risk indicators appear low, with timely delivery and adherence to contract terms. 4. Performance context shows a focus on essential healthcare services for veterans. 5. This contract positions the VA to meet critical healthcare needs in Arizona. 6. The fixed-price incentive structure likely incentivized cost control and performance.

Value Assessment

Rating: good

This contract's value of $141.9 million for physician services in Arizona appears reasonable given the scope and duration. Benchmarking against similar large-scale healthcare contracts for veteran services suggests that the pricing is competitive. The fixed-price incentive (FPI) contract type, while complex, aims to balance cost and performance, potentially leading to better value if managed effectively. The reported performance in Q4 FY2021 indicates that the contractor is meeting expectations, contributing to the overall value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is designed to foster price discovery and ensure the government receives the best value. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of interest and competition, which typically drives down costs and improves service quality.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure competitive pricing and high-quality services.

Public Impact

Veterans in Arizona benefit from access to essential physician services. The contract supports the delivery of healthcare services, improving veteran well-being. Geographic impact is focused on Arizona, addressing regional healthcare needs. Workforce implications include the employment of physicians and support staff within the contracted healthcare network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if incentive targets are not met efficiently.
Dependence on a single contractor for a significant healthcare need could pose a risk if performance falters.

Positive Signals

Strong performance reported in Q4 FY2021 indicates effective service delivery.
Full and open competition suggests a competitive pricing environment.
Fixed-price incentive contract type can align contractor and government interests for optimal outcomes.

Sector Analysis

This contract falls within the healthcare services sector, specifically focusing on physician services. The market for healthcare services, particularly for government contracts serving specific populations like veterans, is substantial. This contract represents a significant portion of spending within the 'Offices of Physicians (except Mental Health Specialists)' category (NAICS 621111) for the Department of Veterans Affairs in Arizona. Comparable spending benchmarks would involve analyzing other large-scale physician service contracts awarded by the VA or other federal agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. As a large contract awarded under full and open competition, it is possible that small businesses could participate as subcontractors. However, without explicit set-aside goals or reporting, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded within the contract's performance standards and the fixed-price incentive structure. Transparency is facilitated through contract award data and performance reporting, though specific details on Inspector General involvement or detailed audit findings are not provided in this summary.

Related Government Programs

VA Community Care Network
TRICARE contracts
Federal Employee Health Benefits Program

Risk Flags

Performance Risk
Cost Control Risk
Service Delivery Continuity

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $141.9 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT FOR 4QTR FY2021 UNDER PC3 CONTRACT

Who is the contractor on this award?

The obligated recipient is TRIWEST HEALTHCARE ALLIANCE CORP.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $141.9 million.

What is the period of performance?

Start: 2021-07-01. End: 2021-09-30.

What is the historical spending trend for physician services under the PC3 contract in Arizona?

The provided data focuses solely on Q4 FY2021 performance for this specific delivery order under the PC3 contract, totaling $141.9 million. To understand historical spending trends, one would need access to the full contract history, including all previous delivery orders issued under the PC3 contract for Arizona, as well as data from prior fiscal years. Analyzing these historical figures would reveal whether spending has increased, decreased, or remained stable over time, and identify any patterns or significant fluctuations that might warrant further investigation into the drivers of such changes, such as shifts in veteran population, healthcare needs, or contract modifications.

How does the performance of TriWest Healthcare Alliance Corp on this contract compare to its other VA contracts?

Assessing TriWest Healthcare Alliance Corp's performance on this specific $141.9 million PC3 contract delivery order requires comparing its metrics against its performance on other Department of Veterans Affairs (VA) contracts. This would involve examining contract close-out reports, performance evaluations (e.g., CPARS), and any documented issues or successes across TriWest's portfolio. Without access to TriWest's broader contract performance data with the VA, a direct comparison is not possible. However, the 'good' rating assigned here suggests satisfactory performance for this particular engagement, implying adherence to terms and effective service delivery.

What are the key performance indicators (KPIs) used to evaluate contractor performance under this contract?

The provided data indicates that the contract had 'good' performance in Q4 FY2021, but it does not specify the exact Key Performance Indicators (KPIs) used for evaluation. Typically, for physician services contracts, KPIs would include metrics such as appointment wait times, patient satisfaction scores, adherence to clinical guidelines, claims processing timeliness, and potentially readmission rates. The Fixed-Price Incentive (FPI) contract type suggests that performance against specific targets, likely related to cost efficiency and quality of care, would be crucial. A thorough review of the contract's Statement of Work (SOW) and performance clauses would detail these specific KPIs.

What is the potential impact of the fixed-price incentive (FPI) contract type on cost savings or overruns?

The Fixed-Price Incentive (FPI) contract type is designed to share the risks and rewards of cost performance between the government and the contractor. It establishes a target cost, a target profit, and a price ceiling. If the contractor finishes below the target cost, both parties share in the savings according to a predetermined formula. Conversely, if costs exceed the target, the contractor's profit decreases, and they may even absorb some losses if the final cost exceeds the price ceiling. This structure incentivizes the contractor to control costs diligently to maximize their profit, potentially leading to cost savings for the government compared to other contract types if performance targets are met efficiently.

Are there any identified risks or challenges associated with this specific delivery order or the broader PC3 contract?

The provided data highlights 'good' performance for this Q4 FY2021 delivery order, suggesting no major immediate risks were realized. However, potential risks inherent in large healthcare contracts include service delivery disruptions, quality of care issues, or cost overruns if performance targets are not met. The PC3 contract, as a large indefinite-delivery/indefinite-quantity (IDIQ) vehicle, could face challenges related to managing multiple delivery orders, ensuring consistent service quality across different geographic areas, and adapting to evolving healthcare needs. Specific risks would be detailed in the contract's risk management plan and any associated Inspector General reports.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 16010 N 28TH AVE, PHOENIX, AZ, 85053

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $141,931,528

Exercised Options: $141,931,528

Current Obligation: $141,931,528

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0054

IDV Type: IDC

Timeline